What Is My Assisted Living Facility Worth?

TLDR: Assisted living facilities typically sell for 3.5x to 5.0x EBITDA or 2.7x to 3.5x SDE. With a national median asking price near $1.5M and median cash flow around $339K, valuations vary significantly based on licensing, occupancy rates, staffing stability, and real estate ownership. This guide explains how buyers think and what drives your number.

Understanding SDE (Seller Discretionary Earnings)

If you've worked with a business broker before—or even just researched what your facility might be worth—you've probably heard the term SDE, or Seller Discretionary Earnings.

SDE starts with your net profit and adds back your own compensation, personal benefits, one-time expenses, and non-cash charges like depreciation. The result is a single number meant to represent the total economic benefit a working owner-operator could extract from the business in a given year.

For small businesses, SDE is the most common starting point in valuation conversations. It's intuitive for owners because it reflects how the business actually functions when you're in it every day—running admissions, managing staff, handling family meetings.

In the assisted living space, SDE is widely used for smaller facilities: a six-bed residential care home or a small board-and-care with under 20 residents. Brokers who specialize in smaller healthcare businesses will often quote multiples of SDE as their primary valuation metric.

One important caveat: SDE multiples are less standardized across the industry than EBITDA-based valuations. Two brokers can arrive at meaningfully different SDE figures for the same facility depending on what they add back and how they treat management costs. That doesn't make SDE wrong—it makes it a bridge. It's the right place to start a conversation about value, and a useful internal benchmark. But as deal size grows and institutional buyers enter the picture, the conversation shifts.

Understanding EBITDA

EBITDA—Earnings Before Interest, Taxes, Depreciation, and Amortization—is the financial metric that serious buyers, lenders, and investors use when evaluating an assisted living acquisition.

The key difference from SDE: EBITDA does not add back the owner's salary or personal expenses. Instead, it uses a market-rate management replacement cost. The logic is simple—when a buyer acquires your facility, they're either hiring someone to run it or paying themselves a market wage. EBITDA normalizes for that.

For an assisted living facility with $338,924 in annual SDE, the EBITDA figure will typically be lower—often meaningfully so—once a reasonable administrator salary is accounted for. If your facility requires a licensed administrator at $80,000–$110,000 per year and that cost isn't already reflected in your books, the gap between SDE and EBITDA can be substantial.

This is not a penalty. It's simply how buyers and their lenders model the business going forward. SBA lenders, regional banks, and healthcare-focused private equity all underwrite on EBITDA. Understanding both numbers—and the spread between them—puts you in a stronger negotiating position before you ever sit across from a buyer.

Direct Answer: For assisted living facilities, EBITDA is the standard metric used by buyers, lenders, and investors to determine what they'll pay. SDE is a useful owner-side benchmark, but EBITDA drives the purchase price in most transactions above $500K. — Regalis Capital

Assisted Living Facility EBITDA Valuation Range

Based on publicly available market data, assisted living facilities currently trade in the following range:

Note: These figures apply to the operating business. Real estate, if owned, is typically valued and transacted separately or adds to the enterprise value.

The national median asking price for assisted living facilities is approximately $1,500,000, with 54 active listings currently on the market nationally. Deals at the upper end of the multiple range tend to involve facilities with strong regulatory standing, low staff turnover, and documented occupancy consistently above 85%.

Assisted Living Facility SDE Valuation Range

For smaller facilities—typically those with under 20 beds or revenues under $1M—buyers and brokers frequently reference SDE multiples as a practical shorthand.

The national median SDE for listed assisted living facilities is approximately $338,924.

Facilities at the high end of the SDE range typically demonstrate clean licensing history, documented care plans, minimal owner involvement in daily operations, and strong family referral networks. Facilities at the low end often face deferred maintenance, pending state citations, or high administrator turnover.

Direct Answer: A well-run assisted living facility generating $338,924 in SDE could reasonably attract offers between $915,000 and $1,185,000 based on SDE multiples alone—before accounting for real estate or licensing premiums.

What Drives Value Up or Down in Assisted Living

Valuation multiples are a starting point, not a conclusion. In assisted living, these factors can shift your multiple meaningfully in either direction:

Value Drivers (push the multiple higher): - Occupancy rate above 85–90%. Consistent occupancy signals demand, operational discipline, and reliable cash flow. Buyers discount facilities running below 75%. - Licensed administrator in place. If you are the administrator of record and hold the license personally, buyers face significant regulatory risk at transition. A qualified, tenured administrator who will stay post-sale commands a premium. - Clean regulatory history. State inspection records are reviewed in every deal. A history of deficiency-free surveys or quickly remediated findings builds buyer confidence. - Real estate ownership. Owning the building substantially increases total deal value and gives buyers financing flexibility. - Documented care systems. Facilities with written care protocols, EMR systems, and consistent staffing ratios present better than those relying on the owner's institutional knowledge. - Payer mix diversification. A mix of private pay, Medicaid waiver, and long-term care insurance is viewed more favorably than single-payer dependency.

Value Detractors (push the multiple lower): - High staff turnover. Caregiver turnover above industry norms is a red flag. It increases liability, affects care quality scores, and makes buyers nervous about post-close operations. - Pending citations or corrective action plans. Any open regulatory matter will require resolution before or at closing, often at significant cost. - Owner as sole operator. If the business can't function without you for 30 days, buyers will price in transition risk. - Deferred maintenance. HVAC, fire suppression, ADA compliance gaps—buyers conduct property inspections and will adjust offers accordingly. - Lease dependency. Leased facilities with short remaining terms, above-market rents, or landlords unwilling to assign leases create uncertainty that compresses multiples.

How Buyers Evaluate Assisted Living Businesses

Buyers acquiring assisted living facilities—whether individual operators, family offices, or regional healthcare groups—follow a structured due diligence process that goes well beyond financials.

Regulatory review comes first. Buyers will pull your state inspection history, review your operating license, and confirm compliance with local zoning. Any history of abuse or neglect citations is often a deal-stopper regardless of financial performance.

Staffing analysis follows. Buyers want to see caregiver-to-resident ratios, administrator qualifications, turnover rates, and whether key personnel have employment agreements or are likely to stay.

Occupancy and revenue quality is scrutinized next. Buyers model occupancy month-by-month, look at average daily rates by payer type, and assess whether your census is growing, stable, or declining.

Transition risk is the final major concern. Buyers want to know: can this facility operate without you? What is the handoff plan for family relationships, care staff, and the license itself?

Direct Answer: Buyers of assisted living facilities prioritize regulatory clean records and stable staffing above almost everything else. Financial performance matters—but a facility with a clean inspection history and a retained administrator will consistently outperform a higher-earning facility with operational red flags. — Regalis Capital

Disclaimer

These ranges are based on publicly available market data and are not a formal appraisal. Actual valuations depend on financial performance, market conditions, deal structure, and buyer competition. This content is informational only and does not constitute financial or legal advice.

Frequently Asked Questions

Does the real estate get included in the valuation multiples above? No. The EBITDA and SDE multiples shown here apply to the operating business only. If you own the building, real estate is typically valued separately—either through a commercial appraisal or as a combined enterprise value—and adds meaningfully to your total proceeds.

My facility is licensed for 12 beds but only has 8 residents. Does that affect my multiple? Yes, significantly. Buyers will value a facility on its current cash flow, not its licensed capacity. However, licensed capacity above current census is often noted as upside, which some buyers will pay a modest premium for if the market supports filling those beds.

I am the licensed administrator. Is that a problem for selling? It's a common challenge, not a dealbreaker. Buyers will require a plan to transfer or replace the license before or at closing. Having a qualified, willing successor in place—even informally—substantially reduces this risk in buyers' minds and protects your multiple.

How long does it typically take to sell an assisted living facility? Assisted living transactions are more complex than most small business sales due to regulatory approvals and licensing transfers. Most deals take 6 to 12 months from listing to close, though well-prepared, clean facilities with succession plans in place can move faster.

Should I improve occupancy before listing, or sell as-is? If you're running below 80% occupancy and can realistically improve it within 6–12 months, doing so before listing will likely produce a higher multiple and a stronger buyer pool. Buyers model forward cash flow—every occupied bed that can be documented in trailing financials adds directly to your valuation.

Get an Accurate Assessment of Your Facility's Value

Multiple ranges tell part of the story. Regulatory standing, licensing structure, and real estate ownership all shape the number a serious buyer will put in writing. If you want an honest, detailed view of what your assisted living facility is worth in today's market, Regalis Capital can help.

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Also see: Sell an Assisted Living Facility · Business Valuation Calculator